Correlation Between FDO INV and ASSET BANK

Can any of the company-specific risk be diversified away by investing in both FDO INV and ASSET BANK at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FDO INV and ASSET BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FDO INV IMOB and ASSET BANK AGRONEGCIOS, you can compare the effects of market volatilities on FDO INV and ASSET BANK and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in FDO INV with a short position of ASSET BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDO INV and ASSET BANK.

Diversification Opportunities for FDO INV and ASSET BANK

0.07

Correlation Coefficient

FDO INV  ASSET BANK

Significant diversification

The 3 months correlation between FDO and ASSET is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding FDO INV IMOB and ASSET BANK AGRONEGCIOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSET BANK AGRONEGCIOS and FDO INV is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on FDO INV IMOB are associated (or correlated) with ASSET BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSET BANK AGRONEGCIOS has no effect on the direction of FDO INV i.e., FDO INV and ASSET BANK go up and down completely randomly.

Pair Corralation between FDO INV and ASSET BANK

Assuming the 90 days trading horizon FDO INV IMOB is expected to generate 14.75 times more return on investment than ASSET BANK. However, FDO INV is 14.75 times more volatile than ASSET BANK AGRONEGCIOS. It trades about 0.07 of its potential returns per unit of risk. ASSET BANK AGRONEGCIOS is currently generating about 0.03 per unit of risk. If you would invest  19.00  in FDO INV IMOB on October 11, 2024 and sell it today you would earn a total of  144,231  from holding FDO INV IMOB or generate 759110.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	86.82%
Values	Daily Returns

FDO INV IMOB  vs.  ASSET BANK AGRONEGCIOS

FDO INV IMOB

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FDO INV IMOB are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, FDO INV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ASSET BANK AGRONEGCIOS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASSET BANK AGRONEGCIOS are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak technical and fundamental indicators, ASSET BANK may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with FDO INV and ASSET BANK

The main advantage of trading using opposite FDO INV and ASSET BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FDO INV position performs unexpectedly, ASSET BANK can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ASSET BANK will offset losses from the drop in ASSET BANK's long position.

The idea behind FDO INV IMOB and ASSET BANK AGRONEGCIOS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.